On 14 June 2016 the government bill of the Transfer Pricing Documentation Act was presented by the Council of Ministers. In comparison to the consultation draft (for details please see our Breaking Tax News No. 3), the government bill foresees significant simplifications, especially with regard to the reporting language but also concerning penalties.

The draft Transfer Pricing Documentation Act that has already been awaited for some time provides for the introduction of obligatory standardized transfer pricing documentation. The draft legislation is based on the OECD’s three-tiered standardized approach to transfer pricing documentation and also imposes penalties in case of failure to comply with Country-by-Country reporting (“länderbezogene Berichterstattung”).